Can Osceola's tourist strip take back its hotels?

Orlando Sentinel's Sara Clarke talks with FOX35 about how US Highway 192 in Florida has changed.

Orlando Sentinel's Sara Clarke talks with FOX35 about how US Highway 192 in Florida has changed.

Sara K. Clarke, Orlando Sentinel

Twice a year, Val and Keith Lupton vacation somewhere along U.S. Highway 192 near Walt Disney World, drawn by the state's famous sunshine and the tourist strip's affordable lodging.

For the past eight years or so, the accommodations chosen by the British couple when planning their monthlong stays have been erratic.

There was the hotel that offered a very good breakfast — but then the Luptons witnessed two groups beat each other with baseball bats in the parking lot. The next place changed hands and headed "down the slippery slope," the couple said.

In recent years, the Luptons have returned again and again to the Golden Link Motel, about six miles east of Disney World at the busy intersection of U.S. 192 and State Road 535. The friendly owner bakes them a cake each time they come to stay.

Still, sitting by the pool recently with sunburned noses, the Luptons noted with distaste what goes on next door, at a separate motel filled with locals paying $140 a week: domestic disputes, shouting matches and evictions, as well as constant panhandling at the nearby intersection.

As Osceola County embarks on what may be the most-ambitious redevelopment yet of its once-famous but now-faded tourism corridor, its biggest challenge may be the hotels and motels that, racked by a decade of recessions and other difficulties, have lost touch with the magic of being on Disney's doorstep.

A 2011 survey by the county's Fire Department found that 16 of the strip's 59 hotels and motels were by then operating — without proper permits — as long-term housing, meaning they allow their "guests" to stay more than 30 days.

Tourism workers have settled into the strip's discount lodgings to be near public transportation and their jobs. Joining them are families down on their luck, day laborers, transients and sex offenders. Many of these low-income locals have nowhere else to go: Osceola has no homeless shelters. Others prefer the stable, weekly price of a low-budget motel to the monthly rent and fluctuating utility bills of an apartment complex.

"As much as we want to move them out of our hotels on 192, there is nowhere for them to go without them losing their jobs," said Dianna Chane, who owns two hotels on 192.

With the economy continuing to improve, Chane is restoring her 534-room Travelodge near Walt Disney World's southern entrance to what it once was: a property catering to budget-minded tourists on their way to Disney theme parks.

The hotel emerged from the Great Recession with its rooms largely occupied by low-paid tourism workers and local families with no other place to stay. But many of the buildings in the complex now cater once again to tourists, and Chane is spending more than $1 million to attract an investor who will take it off her hands.

Her other hotel is a different matter.

Local families still occupy about half the 300 rooms in her HomeSuiteHome property, which is east of Interstate 4 and Disney. Unlike the Travelodge, which now charges about $79 a night for a room, the HomeSuiteHome is getting just $149 a week from its long-term residents.

The place is full and turning a profit — and finally current on its taxes, Chane said. But the international buyers looking at hotels and other tourism properties along U.S. 192 these days don't want fixer-uppers, which are all too common along the 15-mile-long tourist strip.

"They have the money. They want to put it in," Chane said. "They don't care about impact fees or taxes. They just want it to be easy."

Long, slow slide

Many of the first hotels to serve Disney World vacationers after the giant resort opened in 1971 sprang up along U.S. 192. But in recent decades the corridor between Kissimmee and Disney has been forced to reposition itself as an affordable alternative to the tens of thousands of newer hotel rooms built on Disney property or along Orange County's fast-growing International Drive.

U.S. 192 suffered during the 2001 recession and the travel slump that followed the 9-11 terrorist attacks. Six years later, it was slammed again by the Great Recession. In between, it was raked by three hurricanes that passed over the region within weeks of one another in 2004.

Meanwhile, Disney World alone was adding more than 4,700 lower-priced hotel rooms close to the corridor, boosting the resort's "value"-priced inventory to nearly 6,800 rooms.

In 2009, when Orlando's hospitality industry — second-biggest in the nation — was in the throes of recession, the daily room price across the region averaged $92.91. But while hotels near Disney in the Lake Buena Vista section of Orange County were commanding an average rate of $106 a night and those on International Drive were charging $97, those in the Kissimmee submarkets averaged $55 to $80 a night, pinned at the bottom of a growing pile of desperate properties.

As Osceola considers its options for getting long-term residents out of U.S. 192's hotels, the segment farthest from Disney, which extends from S.R. 535 to the Kissimmee city line, is in the worst shape: Many of its motels are filled with locals renting by the week, and abandoned properties abound.

County officials have proposed a "co-housing" pilot program to "create safe and affordable housing" for residents now living in those tourist-strip motels.

Though details have yet to be worked out, a co-housing facility could be an older motel retrofitted to provide its transitional-living clients with such features as a community kitchen and laundry room. The program would screen residents and connect them with other assistance, with the goal of helping them move eventually into an apartment or house.

Some of the hoteliers who have come to rely on income from long-term residents are wary of a co-housing program, which might succeed in moving locals off the strip and into apartments or homes — but couldn't ensure they would be replaced by tourists.

There's also a rumor circulating among owners of the strip's older properties that the county plans to remove undesirable businesses through its power of eminent domain — or by harassing owners until they sell. An ongoing dispute between independent-motel owners and the Osceola County Sheriff's Office over eviction guidelines for nonpaying tenants has inflamed the issue.

Eminent domain certainly isn't the county's first tool "or even the 10th," said Jeffrey Jones, Osceola's "smart-growth" director. But it is possible the county will pursue outstanding liens against properties that haven't paid their property taxes, with the aim of getting them back on the tax rolls — one way or another.

The Golden Link is on the edge of the section of 192 farthest from Disney and next to a residential motel. Last year, sheriff's deputies were called to the Golden Link just 20 times — compared with more than 440 calls to the motel next door.

Jones said she keeps her room rates higher to discourage locals from trying to register. But her loyal vacationers, such as the Luptons, have learned to avoid the 40 rooms that face the next-door property, which makes it harder for her to fill her 84-room hotel.

"The sirens are constantly going," Jones said of the neighboring property. "I've got tenants with me that have been coming since 1984 — it's appalling for them to have to witness this."